IDFC Infrastructure Bonds FAQ

The IDFC Infrastructure Bond post has thrown up some interesting questions from readers which were not part of the post itself, and while I am replying to them in comments – I thought I’d do a fresh post with 5 questions that I thought deserved a post of their own.

1. Is opening a demat account compulsory for investing in the IDFC Infrastructure bonds?

No, it is not.

When this scheme opened there was just the option to invest in it if you had a demat account, but some changes have been made (pdf) and opening a demat account is not compulsory now. You can buy them in physical form also. Their website tells you how to do this.

You can also subscribe to the Bonds in physical form by following these simple steps:

Donâ€™t fill up the demat details in the application form

Compulsorily provide the following three documents with the application form:

Self-attested copy of the PAN card;

Self-attested copy of a cancelled cheque of the bank account to which the amounts pertaining to payment of refunds, interest and redemption, as applicable, should be credited.

Self-attested copy of the proof of residence. Any of the following documents shall be considered as a verifiable proof of residence:

Ration card issued by the Government of India; or

Valid driving license issued by any transport authority of the Republic of India; or

Electricity bill (not older than 3 months); or

Landline telephone bill (not older than 3 months); or

Valid passport issued by the Government of India; or

Voterâ€™s Identity Card issued by the Government of India; or

Passbook or latest bank statement issued by a bank operating in India; or

Leave and license agreement or agreement for sale or rent agreement or flat maintenance bill; or

Letter from a recognized public authority or public servant verifying the identity and residence of the Applicant.

2. Is the interest earned from the IDFC Infrastructure bond tax-free?

While IDFC Infrastructure bonds may not attract TDS – the interest itself is not tax – free. It’s only the Rs. 20,000 you get reduced from your taxable salary that helps save tax.

3. Has the closing date to invest in IDFC Bonds extended?

Yes, the closing date has been extended from 18th October to 22nd October.

4. When do the bonds start trading in the stock exchange?

After the initial lock – in period of 5 years is over, the bonds will list on the NSE and BSE, and start trading there.

5. Which option has the highest yield?

Yield table from the website. Now keep in mind this is just the yield, the lock in periods differ between various series, and that needs to be taken into account while making your decision, however since my earlier post didn’t have this yield table I am including it here.

I have an query:- I have demat accounts in India Bulls and Reliancemoney. My question is weather i can buy these bonds directly through these platforms online without going to the vendor for purchasing these bonds.
Pl suggest

Ram – You can directly buy them through ICICI Direct, – I don’t know if India Bulls or Reliance Money provide that feature or not. You can call the helpline and see. If they don’t then you can fill up an application at a bank branch and submit it there. I think by vendor you mean an agent or IFA (Independent Financial Adviser), and buying them through a bank branch will help you do that.

Ashok: In the coming months, you can expect bonds from LIC, but then, there has been no announcement on their opening date yet. REC is already open till 28th March and IDFC is supposed to close on 4th Feb.

In my opinion , since LIC , if it does come out with infra bonds will not be offering anything more than the current series of bonds are offering.

Not sure about LIC but PFC, IIFCL, IDFC (again in March), probably L&T (again in February) are planning to come up with Infra Bonds in the coming months… So its raining Infra Bonds in the next two months… 🙂

But plz dont remain sleeping till the last time as its not going to help you in any ways. Is it ?? Just get up, do your tax maths now & determine whether you need to invest in these bonds to save tax or not. If you need to, then just go for it as it is a good tax saving investment especially for people falling in 30.9% or 20.6% tax bracket as it adds at least 6.18% p. a. (30.9%/5) or 4.12% p.a. (20.6%/5) to already quoted 8% interest rate. It makes the returns to be over 14% or 12%, but that is before you pay tax on interest earned or Capital Gains Tax to be paid if you sell these bonds on NSE/BSE after 5 years.

For more info about IDFC/REC Infra Bonds, the tax benefits u/s. 80CCF or to invest (Delhi, Gurgaon & Noida) you can call us at 9811797407

See the pathetic face of the KARVY, I have requested trough mail ,lot of times to send me physical cetifcates. They informed that it is sent thtough registred posts, I have checked with PO but PO didnot receive any posts. In this case I have not have certificates nor post offcie have then where it has gone ?.
In registered post if somebody didnot not receive the post will go automatically to the sender, but KARVY didnot have returned post/Certificates.

Afetr so many mails, they sent me format typing information on Rs 100 -Indemnity Bond. Now question is that why should I pay and do these exercise . It is missed by KARVY and not me and KARVY is at fault..

I want to consult the authority which addresses such cases, please advise as I want KARVY should learn a lesson for such misdeed.

Naresh – do you have your application number? Karvy had this link where you could enter the application and download your allotment advice, so you really don’t have to go through all these hassles if you have that.

i have invested in IDFC infra bond in 2/2/11 but i couldn’t get the certificate till now.secondly i am not living at the place which i have mentioned in the application form what should i do in the situation if the certificate return back.please guide me

I had submitted one application for IDFC Infrastructure Bond valued Rs 20000/- in the month of OCT-10, to ICICI Bank, Vashi. The amount has been debited from my SBI, Konkan Bhavan S/B A/C on 25th Oct,10; however till date i have not received any bond/ certificate from IDFC. Unfortunately i have missed out the application serial no. On checking at ICICI Bank, Vashi, they had informed their position being to be just of a receiver and forwarder, and they are of course right. Meanwhile i have also sent a mail to IDFC Manager, informing my predicament. What can be the pragmatic solution; incidentally also have to deposit copy of bond / certificate to my employer in order to claim the I-T exemption for the amount, which actually is now overdue.

So, is this for Demat or physical copy? In case this is for Demat then you can look at your Demat account and see if it has been credited there.

If it’s for the physical form then that makes it complicated but I think one way of dealing with this is to approach Karvy, and establish communication with them. They might be able to pull it out from your PAN number.

I have been allotted four bonds and till date i have not received the Bonds.
The link,
“http://karisma.karvy.com/investor/jsp/IDFC-APP.jsp”
is showing the bonds.
Will the same be considered as Bond or anything else will be posted to the mentioned Address.

I invested Rs.20k in IDFC Infrastructure bond on 22-Oct-10 & did not receive the bond certificate like many other, who posted their queries here. Through the Karvy site mentioned in the response by a gentlemen I got the details of my allotment, which I have downloaded & will submit to my employer in support of my declaration that I have invested Rs.20k in Infrastructure bond for taking benefit on IT.

On the pdf file which I got after submission of my application number, there is no mention of my address. So what I should do now to obtain the original copy of bond certificate. I have alse mailed to their concerned id, mentioned on their website, but there is no response. Please advise what I should do….

Just approach ING Vysya Bank, Janakpuri Branch for PFC Infra Bonds or contact any Investment Services Provider in Dwarka to apply for Infra Bonds of your choice.. If you can visit our office in Lajpat Nagar or any nearby place we’ll get it done for you.. For more info: # 9811797407

Hello, I have applied for IDFC Tranche-I (Appl. no : 22666641) with demat option and I have got acknowledgement email. The amount Rs.20000/- has also been debited my IDBI account. But so far demat a/c is not been updated with these details and would like to know the status of this.
I also need to submit income tax proof in my company and how do I do as I applied with demat option. Do I get any physical copy of this even for demat option?
Pl help.

Dear sir i have invested 20000Rs.in IDFC infrabonds vide application no 17506131 by draft no.777712 drawn on ING VYSYA Bank Ltd BHUBANESWAR branch on date-08.03.2011 till date i have not received my bond certificate so i request you to kindly send my bond certificate at an early date.

Dear Sir,
Subject: Change the name of Bondholder
Bond Details: IDFC Long Term Infrastructure Bonds(2011-2012)-Tranche 1
Registered Folio No: IDD0236579
Certificate No: 236579
ISIN: INE043D07781
Name of Bondholder: PATEL DIPAKKUMAR MANEKLAL
No Of Bonds: 4
Distinctive No(s) : 0000139113-0000139116
My father was holding the above referred bond & i regret to inform u, he has expired on 21st September 2012, so now i would like to transfer bond in my favour.
Kindly inform me the procedure to under taken.

Should you need any further information or need any clarification,please do let me know.